Having given financial literacy presentations to children in our community, I found the recent survey results published by the AICPA (American Institute of Certified Public Accountants) dismaying. According to the survey conducted by Harris Interactive, three in 10 parents never talk to their children about money, or have only had one big talk with their children regarding the subject.
Just 13% of the parents surveyed talked daily to their children regarding financial matters. Instead, they spent time talking to their children about good manners, good eating habits, getting good grades, and the dangers of drugs and alcohol.
While I don’t disagree that those topics are important, I would argue that speaking to children about good personal financial habits is equally as important. And I’m not alone. Federal Reserve Chairman Ben Bernanke was quoted as saying early financial education is important for individual well-being and also the economic health of the United States. Think about how you yourself learned these skills. Was it the hard way or were you fortunate enough to learn these skills at a young age?
Since surveys show that parents, not teachers, have the greatest influence on a child’s financial literacy, parents should start having talks about financial habits as soon as a child is able to express a want. Here are some helpful suggestions: make sure you speak about financial habits at their level. Help them understand how to save birthday money or allowance money to pay for toys and other items they want. It has to be something they care about (trust me, hearing about saving for college at the ripe old age of 7 doesn’t mean much). Repeat these talks often and make them a part of daily life. Share with your children about how you are saving for a family vacation, a new car and how that might affect the family budget.